Aberdeen Group's investment arm is bracing for significant client withdrawals, flagging an expected 4.5 billion British Pounds redemption in the fourth quarter and a larger pull-back from a key insurance partner.
The company said on Wednesday that partner Phoenix Group intends to bring about 20 billion British Pounds of assets in-house over a three-year notice period.
The disclosures overshadowed an improvement in third-quarter performance for the Investments division, which saw net outflows shrink by 49% year-on-year to 1.8 billion British Pounds.
The expected fourth-quarter redemption is from a low-margin quantitative fund due to a client's asset allocation change, according to the company.
"In Investments, AUM has benefited from positive markets as well as net inflows in quants, alternatives and our targeted growth areas of fixed income and real assets," Chief Executive Officer Jason Windsor said.
"Net flows for equities remain challenging, despite a significant improvement compared to previous trends."
Despite the challenges in its traditional asset management business, Aberdeen's total assets under management and administration rose 6% since the start of the year to 542.4 billion British Pounds, buoyed by its interactive investor wealth platform.